i Develop Stocks Advisory

Unitech`s $1.5bn QIP issue on hold Real estate major Unitech Ltd has put on hold a $1.5 billion qualified institutional placement (QIP) issue planned for the first quarter of 2008 in the light of the instability in the domestic stock markets and the global liquidity crunch.

The bellwether Sensex has fallen nearly 20 per cent this calendar. Unitech’s shares have fallen 40 per cent from their peak of Rs 546.80 on January 2, 2008, to Rs 326.50 on Tuesday.

A QIP is a private placement of equity to institutional buyers approved by the market regulator. Unitech’s decision follows the cancellation of initial public offers (IPOs) by Emaar MGF, another major property developer, and Wockhardt Hospitals, due to weak response from investors.

A senior executive of Unitech had told Business Standard that the company could place a maximum of 200 million shares in the QIP and dilute up to 12 per cent of shares on a total paid-up share capital of 1,623.37 million shares.

“We were in the planning stage, but considering the market fall and the lack of investor interest, we have decided to put our plans on hold. In fact, we did not file the issue documents for this reason,” a senior company official said.